And other Health Care Insights from America’s Greatest Contemporary Songwriter

1. For the Times They Are A’ Changin’How ACP Is Helping Internists To Start Swimmin’(so You Don’t or Sink Like a Stone)Bob Doherty, SVP, Governmental Affairs and Public Policy, ACPAmerican College of Physicians South Dakota ChapterSeptember 12, 2013 And other Health Care Insights from America’s Greatest Contemporary Songwriter

2. If your time to you, Is worth savin' Then you better start swimmin' Or you'll sink like a stone The times they are a-changin’ The Times They Are A-Changin‘, 1963

3. Swim or sink? Will physicians, medical schools, and hospitals be able to successfully participate in new payment/delivery models?

4. Swim or sink? Are you ready to: • Be accountable for outcomes, quality and cost? • Accept more financial risk? • Acquire best practices and information systems?

5. Swim or sink? Are you ready to collaborate with others? • No one can do it alone: physicians will need to collaborate with other physicians and health care professionals in their own communities • No one can do it alone: team-based care will replace “silos” of practice • No one can do it alone: policymakers, physician membership organizations, other stakeholders will need to advocate for pay stability, incentives, innovation and flexibility

6. Swim or sink? Will the ACA . . . • Deliver on its promise of providing affordable care to nearly all Americans? • Will the marketplaces work as expected? • Will premiums be affordable or cost too much? • Will the states expand Medicaid? • Will there be enough doctors? • Or will political opposition, complexity, and misunderstanding cause it to fail? • And will physicians help it “swim” . . . or sink?

7. Swim or sink? Will budget cuts, entitlement reforms . . . • Endanger funding for workforce programs, GME, medical research and public health, threatening their survival? • Impose greater demands on teaching programs to be accountable for the $ spent? (And are they ready to accept such accountability?)

8. Payment and Delivery System Reforms • The Medicare SGR and the Future of FFS • Value-based payments • Alternative Models

9. Light at the end of the SGR tunnel? • CBO has lowered the “score” for SGR repeal: $138 billion over 10 years • May 10 letter from Senate Finance Committee sought input from ACP, ACR, and others “as we develop a more viable alternative to the SGR that will provide stability for physician reimbursement and lay the . . . foundation for a performance-based system.” • House Energy and Commerce committee unanimously reported a bipartisan bill to eliminate SGR and reform physician payments

10. House bill is mostly consistent with approach recommended by ACP and others

11. Quality update program (2019) • Physicians self-select a clinical “cohort” for their specialty and type of practice • Creates process for CMS to approve “weighted” measures for each cohort • Measures would address care coordination, patient safety, prevention, patient experience • Measures would be harmonized to extent possible • Physician scored on a 1-100 scale depending on how well they do each year on the measures for their cohort

12. Quality Incentive Program FFS Updates, starting in 2019

13. Alternative Payment Models • CMS will hire a contractor to consider/evaluate APM proposals from physicians and others • APMs must show that they can improve quality without increasing costs, or lower costs without decreasing quality • Two-types of APMs will be selected: • those for which strong data already exist on their effectiveness (e.g. PCMHs) • those that have a high potential but less data on effectiveness

14. Alternative Payment Models • Initial APMs selected within one year of enactment • APMs would not participate in the FFS quality update program (but would considered to have met the reporting requirements—and applicable update for their FFS payments?) • APMs would be paid by Medicare under the payment rules applicable to them

15. Directs CMS to improve RVUs • Agency directed to achieve 1% in savings by reducing “misvalued” RVUs • Savings would not be redistributed to other physician services • CMS would collect data from physician practices who voluntarily agree to provide data on their volume of services, appointment scheduling (with compensation from CMS) • Supplements the RUC, doesn’t replace it

16. Authorizes payment for coordination of complex chronic illnesses, starting in 2015 • Physicians in practices that have achieved independent certification as a PCMH, or as a PCMH specialty practice (PCMH-neighbor), would be eligible to bill and be paid for new chronic care codes • Tracks closely with CMS proposal rule to begin paying for such codes in 2015

17. CMS proposes to pay for chronic care management, defined as: Complex chronic care management services furnished to patients with multiple (two or more) complex chronic conditions expected to last at least 12 months, or until the death of the patient, that place the patient at significant risk of death, acute exacerbation/decompensation, or functional decline; GXXX1, initial services; one or more hours; initial 90 days GXXX2, subsequent services; one or more hours; subsequent 90 days

18. To qualify, CMS proposes that practices must: • Have a Certified, practice-integrated EHR that meets meaningful use; members of the team must have access to the patient’s full electronic medical record, even when the office itself is closed • Employ at least one APN or PA for care of patients who require complex chronic care management. • Demonstrate use of written protocols • Provide 24/7 access • Provide continuity of care with a designated practitioner or member of the care team

19. ACP is asking CMS to make changes in its CCM proposal: • Create pathway for practices that are not certified PCMHs • Eliminate overly prescriptive hiring mandates • Align more closely with new CPT codes for CCM

20. ACP recommendations to improve House bill include: • Higher baseline FFS updates for undervalued E/M services and monitor impact of 0.5% annual updates on access • Require all measures to go through NQF • Further harmonize measures including counting MOC toward qualifying • Create way for practices that are not PCMH-certified to demonstrate they can meet comparable criteria for chronic care codes • Redistribute savings from overvalued RVUs to E/M codes

22. “I want to highlight the letter from the American College of Physicians. They gave us concrete examples, down to how Medicare could incentivize physicians to use guidelines that help them decide when to order tests and perform procedures. This would encourage doctors to provide the care seniors need, and avoid unnecessary care that might cause harm. I’m not saying we will accept all of their suggestions, but their comments help us see different angles of potential policies.” Senator Max Baucus, June 10, 2013 http://www.finance.senate.gov/imo/media/doc/07102013%20%20Baucus%20Statement%20on%20Improving%20the%20Flawed%20Medicare%20Payment%20System1.pdf

23. ACP proposals to SFC • Fund and certify shared decision support tools, focused on the top twenty most expensive and/or most frequent, performed procedures, particularly those that are considered preference-sensitive or are elective • Authorize payment to physicians who use such tools to engage their patients in shared decision-making • Create E/M code modifier for physicians who use High Value Care clinical guidelines in shared decision-making with patients

24. ACP proposals to SFC • Authorize HHS to conduct a pilot-test of benchmarking tools to enable physicians to compare their utilization patterns with their peers and make voluntary improvements • Direct HHS to explore ways to provide physicians with accurate data on the quality and total cost of care provided by other clinicians and hospitals within their geographic communities to enable them to make informed referral decisions

25. ACP proposals to SFC • Continue to support and fund research on comparative effectiveness through the Patient-Centered Outcomes Research Institute • Monitor utilization of high cost/high frequency testing in practices where physicians own their own testing facilities, provide education feedback and encourage more extensive use of specialty-developed appropriateness criteria, targeted at such practices that are outliers compared to peers that do not have an ownership interest

26. ACP’s proposals to SFC • Ensure RVU accuracy: improve RUC process, provide for external validation, set numerical goal to reduce over-valued RVUs to be redistributed to undervalued E/M codes • Reimburse for End of Life/Advanced Care planning • Pay for chronic disease care coordination (including work outside face-to-face encounters)

27. What happens next? • SFC bill expected to be released within days (followed by “mark up?” and Senate vote)? • House Ways and Means committee may modify Energy and Commerce bill, and then the two House bills would have to be reconciled and passed by the House • And then House and Senate will have to reconcile their bills, followed by a vote on an identical bill • All with fewer than 40 legislative days left in 2013! (If not completed this year, a short-term patch into 2014 is likely, allowing Congress more time to complete action on the bills)

28. The ACA (Obamacare) and the Future of American Medicine • What can you expect over the next six months? • And when it is fully implemented over the next decade?

29. Health Care Reform=Disruptive Innovation? “Innovation and disruption are similar in that they are both makers and builders. Disruption takes a left turn by literally uprooting and changing how we think, behave, do business, learn and go about our day-to-day. Harvard Business School professor and disruption guru Clayton Christensen says that a disruption displaces an existing market, industry, or technology and produces something new and more efficient and worthwhile. It is at once destructive and creative.” Howard, Disruption Versus Innovation, What’s the Difference? 3/27/13, Forbes, http://www.forbes.com/sites/carolinehoward/2013/03/27/you-say-innovator-i-say-disruptor-whats-the-difference/

30. Obamacare implementation will: • Be highly disruptive to insurance markets, employers and “providers” (as it was supposed to be) • Political resistance and headlines on “chaos, confusion, and problems” will make it especially challenging (critics are “rooting for failure”) • Will be confusing and not go smoothly on day one, but this is nothing new, same was true for Medicare Part D and original Medicare

31. New York Times, April 23, 1966 http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/17/when-medicare-launched-nobody-had-any-clue-whether-it-would-work/ Source: Sarah Kliff, Washington Post, When Medicare Was Launched, Noboday Had Any Idea It Would Work, May 17, 2013

32. What about so-called “premium shock?” • Some will pay more (healthy and younger) but many will pay less (older, less healthy) • Even those who pay more can’t be turned down and will be getting better coverage (lower cost-sharing, better benefits) than usual plans in small and individual insurance market • Affects very small percentage of the population in small group and individual market

33. Premium “shock and joy” Traditionally, the premium in the nongroup market can be expressed as Pi-premium quoted to individual Xi-expected outlays for covered health benefits for that Individual L is a ‘loading factor’ added to cover the cost of marketing and administration, as well as a target profit margin Reinhardt, Reinhardt, Premium Shock and Joy under the Affordable Care Act, http://economix.blogs.nytimes.com/2013/06/21/premium-shock-and-premium-joy-under-the-affordable-care-act/

34. ACA: A Closer Look Family Health Insurance Premium Obligations Vary by Age, Income Percentage of Premium Paid by Family of Four vs. Covered by Subsidy Percentage of premium paid by family Percentage of premium covered by subsidy 450% Policyholder Age 400% 100 100 100 100 100 350% 88 97 73 53 37 300% 85 64 46 32 77 Family Income as % of Poverty Level 250% 66 73 55 40 28 200% 39 52 20 28 47 150% 32 24 18 12 29 100% 14 15 12 8 6 40 20 30 50 60 Medicaid Medicaid Medicaid Medicaid Medicaid • Analysis • A family of four is eligible for Medicaid at 133%, the same percentage below the poverty level as an individual • A family of four buying coverage in new state-based health insurance exchanges will be eligible for federal subsidies if their joint income is below 400% of the poverty level; above 400%, families pay full cost *For families of four purchasing coverage in the exchange, not through an employer; numbers reflect standard plan for coverage Source: The Henry J. Kaiser Family Foundation.

35. Premium “shock and joy” “Less frequently noted in commentaries about the law — certainly among its critics — is that the law is likely to bring what I call ‘premium joy’ to individuals and families with health problems. Many such people simply could not afford the high, medically underwritten premiums they were quoted in the traditional nongroup market. This joy will be shared by high-risk applicants who were refused coverage by the insurer, along with people now in high-risk pools.” Uwe Reinhardt, Premium Shock and Joy under the Affordable Care Act, http://economix.blogs.nytimes.com/2013/06/21/premium-shock-and-premium-joy-under-the-affordable-care-act

36. What about the Obamacare “delays”? • None of the “delays” announced to date will have a major bearing on coverage expansions or consumer protections that go into effect on 1/1/14 • Even though the delays could smooth implementation and be viewed as a good faith effort by the administration to respond to concerns, critics are seizing on them to argue for repeal

37. What about the Obamacare “delays”? • One year delay in requirement that large employers pay a fine if they do not provide coverage will have negligible impact on % who will qualify for coverage in 2014 • But allows employers and government more time to agree on reporting requirements and implications for workforce, current health benefit programs • Delay in implementing income-verification, employer-coverage to determine tax credit subsidies will not likely have significant effect on who will qualify in 2014 for health insurance subsidies

38. What about the Obamacare “delays”? • Delays that could really affect coverage in 2014: • If the federal exchanges and state exchanges and information hubs are not open for business on October 1 and ready to enroll people on 1/1/14 • Navigators and call centers are not ready to assist consumers • Treasury department isn’t ready to administer the subsidies • (Administration insists all of the above will be ready, but . . . ?) • Physicians and other health care stakeholders aren’t ready to help patients (consumers) understand new coverage options • Continued state resistance to expanding Medicaid

39. Updated 9/4/13 States Split on Participation in Medicaid Expansion Working to Implement (24+DC) Not Working to Implement (21) Debate ongoing (5) WA ME MT ND MA VT OR MN NH RI CT ID SD NY MA WI MI WY RI NJ CT PA IA NE NJ DE NV MD OH DC IL IN UT DE CA CO WV MD VA KS MO KY NC TN OK AZ AR NM SC MS AL GA TX LA AK FL HI • Analysis • The Supreme Court’s ruling on the Affordable Care Act allows states to opt out of the law’s Medicaid expansion, leaving this decision with state governors and legislatures • Governors of states participating in Medicaid expansion cited support for increased coverage for residents as reason for opting in; governors of non-participating states cited high cost of expansion as reason for opting out; governors of undecided states weighing costs of expansion before opting in or out Source: “Status of State Action on the Medicaid Expansion Decision,” Kaiser Foundation, July 1, 2013.

40. Obamacare implementation is facing unprecedented political headwinds • State opposition to expanding Medicaid, setting up exchanges and helping people enroll • In most extreme cases, state opposition is bordering on nullification • Organized political effort to discourage people from signing up • Effort to defund the law, tied to resolution to fund the government and/or debt ceiling

44. Physicians should want Obamacare to swim, not sink • Will provide coverage to tens of millions of uninsured and better consumer protections for everyone else • State resistance to Medicaid expansion will result in 2 out of 3 poor and near-poor going without coverage • Coverage associated with better outcomes and fewer preventable deaths • If Obamacare fails, nothing good will replace it

45. http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/01/these-two-maps-are-incredibly-important-to-obamacarehttp://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/01/these-two-maps-are-incredibly-important-to-obamacare

50. Another Dylan insight There must be some way out of here said the joker to the thief, There's too much confusion, I can't get no relief. All Along the Watchtower, 1967